On April 29, Whirlpool China (600983. SH, hereinafter referred to as "Whirlpool") issued a number of announcements, including the 2023 annual report, the 2024 first quarter report, and senior management changes.
At the performance level, Whirlpool handed in a report card of "reducing revenue and increasing profits". In 2023, Whirlpool will achieve revenue of 4.004 billion yuan, a year-on-year decrease of 6.1%, and net profit attributable to the parent company of 81.1327 million yuan, a year-on-year increase of 190.36%.
Regarding the high profit growth, Whirlpool explained that it was mainly due to the impact of cost reduction and efficiency increase and exchange rate, and achieved certain results in cost reduction, efficiency improvement and product layout.
Also released is the first quarter of 2024. In the first quarter of this year, Whirlpool achieved revenue of 893 million yuan, down 11.3% year-on-year, and net profit attributable to the parent company was 10.266 million yuan, down 9.92% year-on-year.
It is worth noting that Whirlpool's non-operating expenses during the period reached 4.0978 million yuan, with a change rate of 1611.55%, mainly due to the "expected increase in pending litigation in the current period";
On April 30, the first trading day after the announcement, Whirlpool closed at 8.84 yuan per share, up 1.14%, with a total market value of 6.775 billion yuan.
Revenue in 2023 will drop by 6.1%
Domestic sales fell by 32.36%
Judging from the revenue performance in 2023, Whirlpool has suffered "seven consecutive declines". According to the data of previous financial reports, in 2016, Whirlpool's revenue of 6.774 billion yuan reached the peak since its listing, and then the revenue scale shrank year by year, and last year's revenue was only about 6% of 2016.
In response to the decline in revenue, Whirlpool explained, "In terms of domestic sales, in 2023, the company will continue to develop new business channels and optimize existing channels, although the overall sales revenue of domestic sales will decline year-on-year, but the sales structure will improve significantly; ”
"Under the trend of home appliance integration, the business strategy of the domestic market has been adjusted. Whirlpool also said.
Specifically, in 2023, Whirlpool's revenue in China will only be 545 million yuan, a year-on-year decrease of 32.36%. The revenue in foreign regions was 3.36 billion yuan, a slight decrease of 0.04% year-on-year.
Judging from the proportion in 2023, domestic and foreign revenue will account for 13.97% and 86.03%, which seems to have the intention of shrinking the domestic market. However, in the long term, the proportion of revenue shows a trend of domestic and foreign increases.
In 2018, Whirlpool's domestic revenue accounted for 52.6%, higher than the foreign revenue of 47.4%, and in 2019, the foreign revenue exceeded that of the domestic one, and since then, Whirlpool's domestic revenue has been declining year by year.
Whirlpool pointed out that "offline channels actively promote wholesale agents, supplemented by local retail and specialty store models. ”
"In the online channel, through the integration of the model, the dual mode of self-operation + distribution has been promoted, and at the same time, the brand has been steadily promoted to enter the offline sinking channels of Tmall, Jingdong and other platforms. Whirlpool said.
Does this mean that Whirlpool is the opposite of most enterprises that are carrying out "online channels", tilting its main resources to offline and distribution channels? Judging from the data in 2023, the revenue of direct sales channels is only 70.0957 million yuan, a sharp decrease of 41.2% year-on-year, and the revenue of distribution channels is 3.831 billion yuan, a year-on-year decrease of 5.27%.
However, it should be noted that in 2023, Whirlpool's gross profit margin of direct sales will increase by 13.07 percentage points year-on-year to 47.54%, and the gross profit margin of distribution will increase by 2.78 percentage points to 15.04% in the same period.
In addition, Whirlpool also pointed out that the company has expanded cooperation with home furnishing companies, home improvement channels, and engineering customization channels, and strengthened high-end brands, adjusted product structure, and broadened product categories to promote channel efficiency and output.
The share of dominant categories was equaled
Refrigerator destocking output "halved" year-on-year
To find a way out in the current stock market, many leading manufacturers in the home appliance industry have played a high-end and bundled strategy, and Whirlpool is no exception.
According to the financial report, Whirlpool launched a number of new products with high-end market positioning last year. For example, Whirlpool W7 Master series drum washing machine washing and drying sets equipped with AI algorithms, W9 series laundry care machines, W7 series ultra-thin flat refrigerators, and new refrigerators and dishwashers for overseas markets.
Sohu Finance uses "washing and drying set" as the keyword, and after searching for Whirlpool's Tmall flagship store, the page shows that the first three products are high-end products with prices ranging from 17,000 to nearly 30,000 yuan.
(Image source: Whirlpool Tmall flagship store)
Taking last year's new W9 series clothing care machine as an example, the price is not higher than 29,699 yuan, and "you can get a Galanz induction cooker worth 999 yuan when you post an order", but it has been sold as 0 orders.
In the financial report data, in terms of products, Whirlpool's traditional advantageous category - washing machine share in the main products last year has been "equaled" by household appliances;
Specifically, the revenue of washing machines and household appliances was 1.479 billion yuan, a year-on-year decrease of 10.11% and an increase of 7.69% respectively, while the revenue of refrigerators and motors was 646 million yuan and 297 million yuan respectively, a year-on-year decrease of 19.6% and 12.86% respectively.
Looking at the production and sales situation, the production volume of refrigerators decreased by 50.64% to 98,000 units, and the sales volume also fell by about 20% year-on-year, while the production of washing machines and household appliances increased by 6.05% and 16.8% respectively, and the sales volume also changed in the same direction as revenue, decreasing by 4.91% and increasing by 11.36% respectively.
It can be found that the change in sales volume is smaller than the change in revenue, which is mainly due to the optimization of product structure and the increase in price. This is reflected in the change in gross profit margin, which increased by 2.72 percentage points to 15.62% last year.
Among the main products, except for the gross profit of motors, which decreased slightly by 0.1 percentage points, other products have increased to varying degrees.
(Image source: Whirlpool 2022 and 2023 financial reports)
At the same time, the sharp decline in refrigerator production is also closely related to the sluggish sales and the need for destocking. Compared with the obvious destocking effect in 2022, Whirlpool's inventory will increase significantly in 2023, with washing machines, refrigerators, and household appliances increasing by 16.22%, 14.03%, and 42.83% respectively.
Judging from inventory-related data, in 2023, Whirlpool's raw materials, inventory commodities and self-made semi-finished products will total 69.9817 million yuan, a year-on-year decrease of about 32%.
However, Whirlpool will make a provision for asset impairment in 2023: the provision for bad debts in the consolidated statements is 3.3016 million yuan, the provision for bad debts is reversed by 4.7974 million yuan, and the net reversal is 1.4958 million yuan, and the provision for inventory decline reduces the profit of the current period by 13.6274 million yuan.
R&D expenses increased by nearly 3% to 169 million
The number of sales employees fell by 4%.
In terms of profitability, although Whirlpool turned losses into profits in 2022, ending 3 consecutive years of losses. However, its profitability is still under pressure under the situation of continuous decline in revenue.
(Image source: Straight Flush iFinD)
Regarding the profit growth in 2023, Whirlpool explained that it was due to the continuous cost reduction and efficiency increase and the increase in income due to the impact of foreign exchange. From the cost perspective, Whirlpool's operating costs in 2023 will be 3.352 billion yuan, a year-on-year decrease of 9.22%.
R&D expenses increased by 28.7% year-on-year to RMB169 million, of which the main item driving the increase in expenses was "R&D material consumption", which increased by 74% from RMB48.5702 million in 2022 to RMB84.5121 million.
It is worth noting that the number of Whirlpool's R&D personnel in 2023 will be 288, a decrease of 10.56% from 322 in 2022, and the proportion of the company's total number of employees will decrease from 19.01% to 8%, but in the case of a decrease in the number of employees, employee compensation expenses will increase by 4.15% to 68.96 million yuan.
In 2023, Whirlpool's sales expenses will increase slightly by 1.08% year-on-year to 261 million yuan. Among them, employee compensation expenses decreased by about 10% year-on-year, and in terms of the number of employees, the largest decrease in sales personnel in 2023 will be 41.68%, from 559 to 326.
In fact, since the beginning of this year, Whirlpool has repeatedly reported news such as "salary cuts and layoffs". Judging from the financial report, the number of employees in Whirlpool's parent company and major subsidiaries in 2023 will be 3,426, a decrease of about 16% from 4,098 in 2022.
In addition, it is worth noting that in the first quarter report of 2024, Whirlpool's non-operating expenses reached 4.0978 million yuan, with a change ratio of 1611.55%, mainly due to the "expected increase in pending litigation in this period".
On April 27, a former Whirlpool employee who was laid off at the end of February told Sohu Finance that he had won the labor dispute case against Whirlpool (which opened on March 23), "but the company (Whirlpool) will continue to appeal." ”
Personnel changes in the sales department are still ongoing, and Whirlpool also issued a personnel change announcement on April 29, Xin Jianing applied for resignation as the company's director and vice president of sales for personal reasons.
According to the information in the 2023 annual report, Xin Jianing has served as Whirlpool's vice president of sales since May 2021. In 2023, Xin Jianing's pre-tax remuneration will be 569,400 yuan, ranking fourth in executive compensation, only after the head of finance (CFO), vice president of product research and development center and other executives.
It remains to be seen how Whirlpool's product and channel reforms will be effective, how the organizational structure will be adjusted, and how disputes with employees will be resolved.
Produced by | Sohu Finance Author | Edited by Wei Shucong | Wu Ya Operations Editor | Xue Suwen
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